He and I go back a long way. We met when I was a cub reporter and have stayed in touch. Rumour's doing well these days, but he's as rumpled and friendly as ever. He has been called disloyal. That's true. But his sparkling eyes, shock of white hair and frank grin have heralded more hilarious nights than I can soberly remember.
It's been a wild few weeks for the old boy. He's close to becoming a national character in his own right. He's been profiled in New Statesman & Society and is looking forward to a juicy court case. He's been mentioned on front pages in many different contexts recently, though hardly in flattering terms. In fact, it was partly because we were worried about his feelings that a few of us were with him that night. You stick by your friends. After an hour or two of salacious gossip, we were drunk enough to get on to the serious stuff. What, we all wondered, did Rumour have to say about the economy?
Quite a bit, as it happened. Start with all these stories about Norman Lamont's imminent sacking, he said. No smoke without fire. Rumour had heard (he wouldn't say from whom) that John Major was up to the old game played by Margaret Thatcher; let your creatures destroy a minister with leaks, knowing full well that your public expressions of support will fail to convince. What was the Chancellor's fault? Ah, said my friend, tapping his nose, the trouble was the PM was in a panic about the economy. He was worried that if the recovery petered out again, his remaining authority would crumble. But the Treasury and the Bank of England were cool. Mr Lamont kept murmuring about the pound and the need for never- ceasing vigilance on inflation. He was not 'political' enough for No 10.
I pointed out that this could not be true. Mr Major was staunchly anti-inflation. That was why he had struggled so long to keep sterling in the exchange rate mechanism. Another hack said that Mr Major's commitment to Maastricht meant the process of building an independent, anti-inflationary Bank of England would start during stage two of monetary union, whether or not we opted out of the single currency. Whatever the legal position, the drift towards Bank independence had begun. Both its new governor, Eddie George, and the new deputy, Rupert Pennant-Rea, were strongly pro-European and fervently anti-inflation. Mr Pennant- Rea was also a public partisan for Bank independence.
What did that tell us about Mr Major? It suggested a man who meant what he said, a man so hostile to ministerial messing about with the currency that he was prepared to see the Bank become independent of day-to-day politics. His political rhetoric, his appointments and his behaviour at Maastricht all pointed one way. The mere idea that he could now be demanding ever-faster interest-rate cuts, and undermining his Chancellor to get them, was farcical. I told Rumour that he was becoming simply incredible.
But Rumour has a way of making you feel small and ill-informed. Did we not recall, he asked, that Mr Major had said publicly he was not in favour of independence for the Bank (Hansard, 1 July 1990)? That, despite Maastricht, he was trying to keep his options open? That he was a political operator before he was an anti-inflationist? And that the anti-Lamont stories came from people who purported to be the Prime Minister's friends? All Mr Major needed to do was to say publicly that interest rates were decided by the Chancellor, who would be staying in his post for a year more, at least. Otherwise, as he knew perfectly well, Mr Lamont would still be regarded as politically dead.
But Mr Major had not said that. 'I do my best work,' Rumour reminded us, 'in an atmosphere of confusion, when there is division at the top and no clear policy. Can you tell me that Mr Lamont is safe? You cannot. Can you tell me what the Government's policy is on interest rates, now we are out of the ERM? You cannot. Meanwhile, Rumour flourishes. We are friends here. I wouldn't bother, in this company, to defend all my little tales. But I maintain that when it comes to this matter, the PM is my greatest ally.'
From that point on, my memory of the evening is pretty hazy. That often happens at Dot's. But Rumour, surely, had a point. Downing Street says Mr Major is not second-guessing Mr Lamont. The latter believes himself to be supported by Mr Major. But the drip, drip of criticism has gone on for so long, and so persistently, that it has become serious stuff and a factor in economic confidence. Mr Major can clear this up either by sacking Mr Lamont quickly, or by backing him more publicly and forcibly than he has done so far (and, preferably, omitting the word 'unassailable' when he does so).
With the currency markets in turmoil and the pound and the recovery weak, confidence in the Government's unity and sense of purpose matters more than whether interest rates are at 5 per cent or 6 per cent. Confusion over Mr Lamont's true status is causing real damage. Rumour, as I say, is an old mate of mine. But Mr Major needs to settle his hash - not in the courts, but in the Commons.Reuse content